Waiting with baited breath and in excited
anticipation of the Democrats (of all groups!) in Illinois to do what it has
taken Republicans to accomplish in other states, Caterpillar CEO Doug
Oberhelman is openly announcing his endorsement of the Nekrtitz/Biss assault on
public sector workers as culprits for the state of Illinois’ debt burden –
actually a result of holding to corporate preferred flat tax revenues,
providing for corporate tax loopholes and giveaways, and ignoring multiple
opportunities used by other states to match changes in the economic realities
of a modern world. Always remember,
when someone like Caterpillar’s CEO
Oberhelman says a bill like HB1673 “would be better for the state’s long-term
fiscal health,” he’s not talking about the people. In his mind, corporations and states and Doug
are people, my friends. Not you, not me,
not us collectively.

Remember last post, North Carolina held its breath
and awaited the call from Caterpillar; alas, it was not to be. Instead, Caterpillar chose another rival:
Georgia, despite North Carolina’s promise to provide $70 – 90 million in perks
and tax credits.

The people of Athens, Georgia, couldn’t be
happier. Like those workers in Muncie,
Indiana (see last week), they also look forward in a right-to-work state to
help produce the mini excavators and small tractors. Caterpillar seeks to use the cheapest labor
available to export to emergent economic markets, and Georgia fits the bill. Right-to-work states have received lots of
press lately, especially from presidential candidate Newt Gingrich, who regards
them as a large and suitable weapon in the attempt to improve his vision of the
economy. According to the National Right
To Work Foundation, the organization was founded in 1968 to “eliminate coercive
union power and compulsory unionism abuses through strategic litigation, etc.”
(www.nrtw.org/en/about)

In fact, although the true correlative reasons may
be quite skewed, the greater number of companies that have moved their
operations to RTW states in the last few years supports Gingrich’s vision. We in the middle class can all sleep less
easily with this in mind. Of course,
Newt would have our kids working as janitors too, but I digress…

But seeking cheaper labor and little if any
workman’s compensation on the national level is only one way of cutting pesky
labor costs. Caterpillar’s strategic plan is after all much greater than just a
city, state, or country. In fact,
Caterpillar has a much larger vision and interest in the world’s economy.

In the global market, Caterpillar promotes schemes
and strategies that, while legal, certainly leave one to wonder about
ethos. According to a suit filed by one
of their own global tax strategy managers, Caterpillar, the world’s largest
construction-equipment maker, sold and shipped thousands of parts from an
Illinois warehouse while improperly attributing at least $6.5 billion of
profits from those sales to a specious unit in Geneva (Green, Peter S. Caterpillar accused of demoting executive
discovering $2 billion tax dodge.
Bloomberg. 8 July 2011.). It was called the “Swiss Strategy.”

But this is only one smaller aspect of a greater
profitable paradigm planned by Caterpillar, as it moves to affect political
decisions on the international level.
“Peoria-based caterpillar, which reported year over year earnings growth
exceeding 250 percent in each of the last two quarters, is among several U.S.
multinationals asking Congress to end U.S corporate income taxes on profits
earned abroad. The company had $3.7
billion of pre-tax income last year on $42.6 billion in revenue, 68% of which
came from offshore” (Green, Peter S.)

Unabashed, the CEO, Doug Oberhelman has declared the
company must now promote lobbying on the global arena to assure such breaks in
the present and the future: “We have to have a voice in writing regulations
that are fair to all sides…I feel an obligation to all of our constituencies,
when things aren’t going the way we think they should probably be going, to
speak up. That applies in Illinois or
China” (Harris, Melissa. www.chicagotribune.com/business/ct-biz-0316-confidential-oberhelman-web-vrsion-20120316,0,6458064.column ).

By using their “Swiss strategy,” Bloomberg asserts
that Caterpillar is able to reduce its tax responsibilities to the U.S. nearly
10%, from 26 percent of about $27 billion from 2000-09 instead of the rate of
35%. But according to the corporate
whistleblower in Caterpillar, the company’s Geneva Switzerland subsidiary had
no employees dealing in spare parts nor did anyone do any work in selling or
shipping spare parts. In fact, the spare
parts were actually in a warehouse in Morton, Illinois, and all parts were
shipped worldwide (despite Caterpillar’s assertions) by the employees in
Morton. Also, according to Bloomberg,
the warehouse’s spare parts business was the company’s most profitable line
(Green, Peter S).

Not to be thwarted, Caterpillar also designed and
enacted a new and improved Bermuda strategy, “aimed at returning some cash to
the U.S. without paying any taxes on it,” according to documents secured in the
investigation of the whistle blower.

Important:
Congress is currently considering a one-time tax holiday that would
reduce the rates of foreign income for multinationals like Caterpillar and
others brought into the U.S. from 35% to 5.25%.

When queried about recent discoveries and the
emphasis in congressional lobbying, Caterpillar spokesman Jim Dugan said the
company “has engaged in no wrongdoing…Dugan declined to comment on the suit’s
allegations, saying Caterpillar ‘complies with all applicable tax laws and
regulations’” (Green Peter S.).

About Me

I am a retiree, political activist, social advocate and community volunteer. I taught at Lyons Township High School in LaGrange for 34 years in the Language Arts classroom and worked as an administrator for several years. My current avocations include various community outreach and assistance programs. Having benefitted from employment in a collegial, reflective teaching environment that encouraged dedication and professionalism, I continue to seek the promotion of education at all levels as a long-term effort combining talent, perseverance, commitment, and constant professional growth - not a blind adherence to a business model of measured production.

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